New Year financial resolutions

Many of us will have found it difficult to make ends meet in 2012, but if you want to make sure 2013 is less of a struggle, it's time to make some New Year financial resolutions.

From giving your savings a kick-start to making sure you don't pay over the odds on your debts, sorting out your money matters can result in substantial savings. We explain how to start 2013 as you mean to go on...

Cut the cost of your credit card debt

If you've got debts languishing on credit or store cards which are charging you steep rates of interest, don't delay in moving them onto a 0% balance transfer card.

For example, switching £2,000 worth of debt on a card charging an average annual percentage rate (APR) of 17.32% to a balance transfer credit card offering 0% for the first 24 months would result in an annual saving of £238, after the balance transfer fee has been taken into account.

Make sure you don't miss any payments though, or fail to pay on time, as you will be hit with extra charges and could lose any special promotional rate you are on. It could also damage your credit score.

Pay more than the minimum

Pay as much as you can afford off your credit card each month. If you only make the minimum repayment it could take years to clear your debt and you may end up paying more than the entire value of the original purchases just in interest.

For example, according to calculations by MoneySupermarket, someone with a balance of £1,500 on a card with an average APR of 17.32%, making only the minimum repayment of 2.5% each month, could take 19 years and three months to clear their debt. They would also end up paying an extra £1,590 in interest in the process.

When your car or home insurance is up for renewal, don't just go with the quote from your existing insurer. Always compare prices first to ensure you aren't paying over the odds.

Motorists can save an average of £400.52 by using MoneySupermarket car insurance comparison channel to find the best deals, while home insurance customers knock an average of £125.19 off their premium by shopping around. Combined, that means an annual saving of more than £525.

Remember, too, that paying annually for your insurance policies - if you afford to do it - will be cheaper than paying monthly over the year.

Get a better deal for your energy

All six of the big energy suppliers have now announced prices hikes, with E.ON the last to introduce steeper costs. With effect from 18 January 2013, it will raise gas and electricity prices by 8.7% for dual-fuel customers, pushing average costs up from £1,260 a year to £1,370.

But millions of households are paying hundreds of pounds a year more than they need to because they've never changed their energy tariff. The easiest way to make savings is to move to a dual-fuel online direct debit deal and shop around for the cheapest deal.

For example, by switching to the best online dual-fuel tariff, currently First Utility's iSave v13, customers could save on average £214 over 12 months.

Save a little each month

Savings rates may be low, but it's still as important as ever to try to put a little bit away each month to build up a slush fund in case of emergencies. Making sure you are earning as much interest as possible is vital too, so, again, compare the savings deals on offer.

For example, switching from an easy account paying the average rate of 0.27% to a savings account offering 2.35% could generate an extra £104 in interest a year based on a savings pot of £5,000.

Use your ISA allowance

With savings rates so low, it's more important than ever to make the most of your annual tax-free allowances. You can put up to £5,640 in a cash ISA before 5 April 2013 and interest earned is tax- free.

You can also put the same amount into stocks and shares, or alternatively you can invest your full £11,280 allowance in stocks and shares. However you choose to distribute your cash, you should always compare ISAs for the best rates, as you would any other savings account.

Review your mortgage

Mortgage rates are highly competitive at the moment, and if you aren't already locked into a particular deal, you might be able to make big savings by switching. Moving a £150,000 mortgage from the average standard variable rate (SVR) of 4.33% to the current market leading two-year tracker rate from ING Direct at 2.49%, would save £794 annually.

If you are considering remortgaging, check that you don't have any early repayment penalties on your existing deal, as these could wipe out any potential savings.